Answer:
the cost of capital for the common stock is 10.82%
Explanation:
The computation of the cost of capital for the common stock is as follows:
= (Dividend to be paid next year ÷ Price of the common stock) + growth rate
= ($14 ÷ $179) + 0.03
= 0.078 + 0.03
= 10.82%
Hence, the cost of capital for the common stock is 10.82%
We simply applied the above formula so that the correct value could come
And, the same is to be considered
